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In Nokia World the fightback has begun

Rory Cellan-Jones | 16:25 UK time, Tuesday, 14 September 2010

I've spent the morning in another world. It's located in a vast gleaming building in a remote spot in east London, and it's packed to the brim with people who will tell you that they have seen the future of mobile phones and it will be dominated by a very clever Finnish company which still knows best what people want. Welcome to Nokia World.You might not believe if you saw the vast and impressive show Nokia has laid on at London's Excel centre that this was a company in trouble. Crowds of developers, technology analysts and journalists flocked into an opening keynote where Nokia unveiled four new models with the usual hoopla.

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The morning started with Niklas Savander, Nokia's marketing boss,  telling us that his firm still dominated the smartphone market, selling more phones than Apple and Android combined. And there was a sly dig at Apple, when he boasted that Nokia's devices worked "whichever way you hold them".

And then the main presentation by Anssi Vanjoki, the man who runs the handset business, explained why the new phones, and in particular the N8 would blow the opposition out of the water. The hardware was better, the software was superb, the Ovi services outshone anything that the likes of Google's Android could offer. The mesage was clear - the fightback has begun. Although, as I found after a quick web search, Mr Vanjoki had made the same claim in a blog back in July.

If any phone is designed to win Nokia back its reputation as the coolest smartphone brand - rather than "the one your dad has" as an analyst put it to me - it is the N8. I had a quick play with it, after the keynote. On stage, the big boast was that you could plug it into your telly and play HD video straight from the phone, and that it had a fabulous 12-megapixel camera delivering better photos than any other phone.

That emphasis on the hardware struck me as missing the point - do people really buy phones these days for the quality of their video replay - or even for the number of megapixels they promise? I think it's the software that matters, and here Nokia does appear to have made progress. At first glance the Symbian 3 operating system on the phone looks much more intuitive than its predecessors. In fact it makes the N8 work just as easily as, ooh, an Android or an iPhone.

Will that be enough? I'm sure the N8 will sell well, but the problem for Nokia may be that it still won't deliver the chunky profit margins enjoyed by Apple. And is Nokia's own board confident that its new range of phones and the latest version of Symbian will be enough to win back its reputation as the most innovative firm in the mobile industry?

It seems not because Annssi Vanjoki resigned yesterday, after failing to convince the board that he, rather than Microsoft's Stephen Elop was the man to lead Nokia back to the promised land.

In such difficult circumstances, Mr Vanjoki did a great job today of promoting the company he is now leaving after more than a quarter of a century. How ironic it would be if the phones and the strategy which he has been instrumental in shaping end up making the sun shine again in Nokia World.

Comments

  • Comment number 1.

    And there was a sly dig at Apple, when he boasted that Nokia's devices worked 'whichever way you hold them'.

    Ha! Clearly, the Nokia N97 mini doesn't count.

  • Comment number 2.

    The problem Nokia has is not the number of phones it sells but the profitability of the company overall.
    Each year they sell more devices, and each year the profit falls.

    Profit has to come from adding value. In its simplest sense, selling $250 worth of components to a customer for $500 like Apple do. From their financial statements it seems that Nokia struggles to sell $90 worth of components for $100.

    Nokia has a number of problems which were demonstrated today.

    First their software development is chaotic, with fragmented operating systems. Currently Nokia are actively investing massively in developing not one but two platforms (Symbian and MeeGo) when most of their rivals outsource the entire cost of OS development to Android. Why two? Because one is old and clunky and desperately needs updating to be competitive, and the other is new and unfinished.

    Nokia's desire to compete vigorously with itself also extends to its product range. With too many handsets with seemingly identical feature sets. Watching today, I rapidly became confused about why I would want one over the other.

    And finally, not satisfied with that, Nokia has a long-standing habit of pre-announcing hardware months ahead of it becoming available. This is just nuts.

    It stifles demand for existing products - and by the time the new handsets emerge, they seem quite old-hat. We have been hearing about the N8 for months now. And they repeated the same trick with the N900, The N97 and so on. Nokia seem determined to send customers the message, don't buy this, there's something better round the corner.

    I would like to see Nokia get its act together. But today was the same old company, with the same old mantra.

    C.

  • Comment number 3.

    Good to see this coverage of Nokia's new handsets. If Nokia's situation can be summarised as "having market share but not mindshare", it would be interesting to examine the reasons for the latter.

    Certainly Nokia has done this. Basically Google controls Android, but are able to call it "open source" because a lot of the code is under open-source license. However, key aspects of the code development process are greatly restricted.

    Nokia's approach with Symbian (and Meego) is to provide a mobile operating system whose development is, in theory at least, not controlled by any one company. In fact, you could say Nokia has bet the farm on their ability to deliver and capitalise on this idea.

    In a similar way, a social networking system like Diaspora has the potential to lead mindshare too: There's no technical reason why a social networking site should be privately owned (distributed P2P techniques can cover server requirements).

    Whether Nokia can grasp the simplicity of what they have begun to put in motion, is a big question.

  • Comment number 4.

    Rory Cellan-Jones.

    "At first glance the Symbian 3 operating system on the phone looks much more intuitive than its predecessors. In fact it makes the N8 work just as easily as, ooh, an Android or an iPhone."

    it may be a while yet before I can justify retiring my E61i, but the above gives me some hope that its replacment will be another Nokia, thank you.

  • Comment number 5.

    0321230 #3.

    "Basically Google controls Android, but are able to call it "open source" because a lot of the code is under open-source license. However, key aspects of the code development process are greatly restricted."

    the SDK (including emulators) can be downloaded for free, so which "key aspects of the code development process are greatly restricted"?

  • Comment number 6.

    It looks like Mr. Savander might have been running a bit fast and loose with his figures.

    He quoted that Nokia was achieving some 260,000 smartphone activations per day. Which was more than Apple and Android combined.

    Apple say iOS activations are running at 230,000 (a good proportion being iPhones)
    And Android is running at 200,000.

    Nokia's simply claim can not be correct.

    Perhaps someone pressed a minus instead of a plus on one of those tiny keyboards?


    C.

  • Comment number 7.

    @Carniphage

    The iOS activations include iPod Touches and iPads. Neither are phones and are therefore irrelevant in this context. Android ships 200,000 a day. Nokia sell 260,000. His figures are perfectly plausible.

    As for your previous post, did it occur to you that if Nokia sell more N8s, E7s and C7s in their mix rather than, say, 5800s and 5350s then the ASP and profit will go up? Your thinking is of yesteryear, not Nokia's.

    There has been a lot of nonsense talked across blogs today. Ultimately the only thing that will really matter are Nokia's Q4 results.

  • Comment number 8.

    @jr4412 #5

    You are entirely correct that application code development is open on Android - and furthermore, it is considerably less subject to the kinds of restrictions imposed by Apple for their apps.

    However, when the process of developing the operating system itself is somewhat locked down - not the kernel, which is Linux - but key UI design aspects, APIs, strategies - all decided within one organisation in a closed process, this is of some concern to those who value openness.

    In practice, right now, Android is a superb platform to program for. No doubt about it. The question is more long term, as to whether you want all phones and derivative technologies (iPad for example) in some way controlled directly by commercial interests.

  • Comment number 9.

    0321230 #8.

    "..all decided within one organisation in a closed process, this is of some concern to those who value openness."

    well, we may live in 'interesting times', the Wikipedia page for the Dalvik VM states: "On the 12th of August 2010, Oracle, owner of Java since it acquired Sun Microsystems in April 2009, sued Google over claimed infringement of copyrights and patents. In developing Android, it is alleged that Google knowingly, directly and repeatedly infringed Oracle's Java-related intellectual property."

  • Comment number 10.

    @jr4412 #9

    Regarding the case against Dalvik - whoever wins this battle, there are small but key components of any mobile OS that cannot be implemented openly because of patents. The current bout of patent disputes between all the big players - Apple, Google, Nokia, Oracle - means one thing: Regardless of the existence of a desktop Linux, a truly open mobile OS will be VERY difficult to achieve.

    Nokia's take on all this is fascinating - Symbian is claimed to be heading towards complete openness of all components. That will be an impressive achievement.

    There are too many strands in this discussion to connect together here. Yes - interesting times. Phones are like early desktop PCs, in terms of the state of their evolution.

  • Comment number 11.

    I agree wth much that has been said and Nokia could learn a lot about their marketing strategy of new phones by cutting the number of releases and keeping cards to chest until naming a launch date.

    "the one your dad has" is an interesing analyst comment, could that perhaps be because we have passed the old ones in that direction and in 2-3 years time the dad's phone will be an iphone 4? Having had a number of mobiles over 14 years nokia, motorola, sony-ericsson, ... cant say I'm brand loyal but have always looked for features and certainly this is the main reason I do not have apple, it lags the field - but packages nicely so can charge extra.

    anyway speaking as a nokia owning dad of toddlers, still happy with my 2yr old Nokia running s60 i just cant see the fuss about apps, our 4year old spends more time playing with them than the wife which is the perfect reason not to have apple ... ive got a 5MP camera that takes as good if not better stills than wife's, it has free sat nav (but could do google map if i wanted), I can swap data cards out, I can play MP3, I can wifi, I can TV out with a cable that came boxed with it, .... Keep leading the way with features Nokia and I will be back for more - though not until I feel am left behind in the market.

  • Comment number 12.

    0321230 #10.

    "There are too many strands in this discussion to connect together here."

    yes, as with all worthwhile subjects. :-)

    "..key components of any mobile OS that cannot be implemented openly because of patents."

    you support the FSF I take it, have you seen this video? (plodding but informative)

    http://patentabsurdity.com/watch.html

  • Comment number 13.

    "Although, as I found after a quick web search, Mr Vanjoki had made the same claim in a blog back in July."

    Good to see you're on top of your game as usual, Rory! ;-)

  • Comment number 14.

    @jr4412 #5

    "the SDK (including emulators) can be downloaded for free, so which "key aspects of the code development process are greatly restricted"?"

    Yes, they can be downloaded for free, but just try submitting a code patch or enhancement to Google - it's a nigh on certainty that your patch will be rejected for no good reason simply because Google strictly controls the code development process, it's far from open as they claim and is pretty much off limits to "outsiders".

    Your belief is one of the fundamental misconceptions relating to open source - free as in free beer, or free as in free speech? Gratis or libre?

    Android, MeeGo and Symbian are all open source, but Android is firmly in the free beer camp while MeeGo and Symbian give developers freedom of speech.

    Free (as in no cost) does not mean free (as in freedom, open, libre etc.)

  • Comment number 15.

    I'm sorry, Rory but I think you have missed the point somewhere in there. I am 49 going on 50 and I know my children couldn't give a hoot about the OS - it is the camera and the HD. Nobody should try and compete with Apply head on - PCs are still selling well and they don't dig at the Mac at any opportunity. They just focus on what they can do best and this is what Nokia should be doing. Sure, people will spot the performance difference between the phones but do users talk about Symbian, Android or Apple OS? No, they talk about which one is the coolest to own and easiest to use.

  • Comment number 16.

    If Nokia want to gain a larger share of the market they need to improve their customer service. I contacted them about my N97 mini (which is rubbish don't get one) I had to ask the same question (via email) SIX TIMES before I got a response that actually acknowledged my question (all the rest were template 'please refer to our website' when I'd said that I'd tried all the suggestions on the website. Eventually they sent a sarcastic reply (Dear Ms Friendly-admittedly I had lost my temper by now but I had asked the same question 6 times). Not surprisingly they wouldn't answer me when I requested complaints procedure details. I can't be bothered to go into this again, I'm so fed up with them. Here's the jist of it: DON'T BUY NOKIA PHONES IF YOU WANT DECENT CUSTOMER SERVICE.

  • Comment number 17.

    I have owned many Symbian phones and many iOS devices, and I can tell you right now that unless this new version of Symbian is an ENTIRELY new system (by which I mean, completely and utterly revamped), it will fail.

    Oh, it'll sell lots, because phone stores and networks give away free Nokias as upgrades and on cheap contracts like they've gone out of fashion - but that's because they HAVE gone out of fashion

    It is all in the software, and the competing platforms (iOS, Android, webOS) provide a MUCH better experience than Symbian does.

    Hell, on my 5800, I couldn't even get the Ovi Store to work properly, and when I finally did, I had to to a factory reset of the phone to make anything from it run properly. Then it got corrupted and I had to reset it twice more, wiping all my contacts, messages, etc. each time.

    And have you TRIED making IMAP e-mail work properly on a Symbian phone? Believe me, if you haven't, you don't want to. I imagine it's the type of user experience you get punished with in hell.

    I got a replacement phone, but all it did was throw a bunch of new issues in my face. Utterly useless rubbish.

    If a smartphone is what you want, you'd have to be a masochist to choose Symbian as your platform.

    These phones will be owned by people who don't care what phone they have as long as it looks nice and does basic phone calls and texts. And that's a declining market. The hot thing is smartphones, as Nokia very well knows. So they need to make a proper effort - which they have not done.

  • Comment number 18.

    ...Oh, and I've also had experience with - and currently own - multiple BlackBerries, all of which are much better than any Symbian platform.

  • Comment number 19.

    Oddly, I'm considering getting a new phone, although there's nothing actually wrong with my Nokia 6500s, as a phone and texting device it's brilliant, and the camera is actually usable. It's even survived getting really wet several times and even a beer bath. However I find the rest of it clunky, so I never use the MP3 player, for instance.

    The talk of mindshare is correct. I'm not even looking at Nokia phones, in my head they're limited compared to the other options there are. If I'm going to change my phone I want certain things, a decent touch screen, GPS, maps, MP3 player, camera, apps (and ideally for £20/month) and none of the current gen of Nokia's seem to come close (I'm drawn to the HTC Wildfire at the moment).

    So, Nokia have to really turn things around to make people want their phones again, long gone are the days when you could wander into any office and say "anyone got a Nokia charger?" and be presented with numerous affirmatives. My friend offered me a second-hand N97 and I really wasn't even remotely interested even though it's several degrees "better", it'd have just felt like the daddy version of mine, so what's the point?

  • Comment number 20.

    @MacBook Pro

    "it will fail"

    and...

    "Oh, it'll sell lots"

    Holy conflicting statements, Batman!

    Incidentally, how many Blackberries, Android handsets and iPhones do you think would get sold without subsidised contracts? Just askin'.

  • Comment number 21.

    Having just reluctantly moved from Nokia after 10yrs to Apple our friends at Nokia might be interested to know why:

    + OVI store sucks - utter rubbish to download European maps you do this country by country - duh!
    + Apps do not integrate seamlessly
    + No way to pay

    So moving on how can Nokia get back their "mojo" - not easy but here is one way:

    + Go open system sell handset but let the buyer choose O/S
    + Make phone standard remote control for TV/Video
    + Enable phone to be a torch as standard
    + With auto manufacturers enable phone to be car remote lock device
    + With Auto makers eg: Fiat on new Panda, make the phone the, digital speedo, odometer, trip, , aDAB radio, GPS, MP3 Player and mobile wifi hot spot, central locking device.
    + Go feature rich people need eg: Dual SIMs(personal/busines or family/lover)
    + Dual memory card one for GPS one for Pictures/Video
    + Deliver stands to make Phone a webcam/with link to pc "softphone".
    + Go HD video with seamless loading to YouTube
    + Standardise contact books across the industry for upload to PC download to new phone with fully integrated office alike packages
    + Go green with highest level of recycling in industry
    + Buy Skype and make a standard so users via wifi use Nokia not the network to connect.
    + Buy Whatapp to do for txt as above
    + Develop a mobile banking package for sale to networks and banks globally in support of a micro payment system.

    Do a deal with Apple so OVI store matches iTunes for range, speed of service and flexibility.

    Until this is done to perfection and more Nokia are at real risk of losing their way and going the way of Motorola - where are they now. BTW I used to have a Motorola handset now I just never think of them as a viable handset vendor.

  • Comment number 22.

    I love reading Mark_M$FT's comments, they really do show a person who cannot understand numbers.

    "Incidentally, how many Blackberries, Android handsets and iPhones do you think would get sold without subsidised contracts? Just askin'."

    But the fact is, Mark, they are selling, in their tens of thousands, WITH subsidised contracts. Your question is once again irrelevant, because it simply isn't happening but you throw it in as a curveball to deflect the attention away from your incorrect figures.

    Nokia are sliding, rapidly, downhill.

  • Comment number 23.

    If Nokia handsets work fine whichever way you hold them, why do their manuals warn you not to cover the antenna area with your hand while using them?

    Regarding the point about megapixel-count, many people do base their buying decisions on such things. One of the great myths that many have swallowed from the marketing folks is that more megapixels mean better quality photos. Unless you intend to print your photos on large posters megapixel counts are largely useless as a means of determining photo quality once you go beyond 5 or 6 megapixels. It's the quality of the actual lens, the amount of light that reaches the sensors in the camera and the size of the individual pixels.

    The reason why in most comparisons the iPhone 4 camera beats many higher megapixel competitors is that the individual pixel size is higher, meaning each one can capture more light, and the construction allows more light to reach the sensors. I have no idea what kind of quality the Nokia N8 can manage. It may be a step up, but it'll have next to nothing to do with the fact that it has a 12 megapixel count. Too many camera manufacturers try to cram as many pixels as they can in because that statistic is what sells the product. Nevermind that the product would take better photos if they kept the count down a bit.

  • Comment number 24.

    A Nokia handset might work fine whichever way you hold it, but it also crashes fine whichever way you hold it, and both my personal and business handsets do that a lot, especially the E72. Maybe other handsets aren't perfect, but Nokia always used to make stable, reliable handsets and now they are slightly worse than most in my experience. Nokia have lost their way, but lost sight of how to correct this. Looking around the tubes and trains of London I find it staggering that Nokia has double the handsets out there when every other person has an iPhone and plenty of the others are carrying an Android device.

    All the talk in terms of the future is what Microsoft might bring to the table with their new Windows phone, and its ability to easily port over XBox games - now thats a killer feature. People want access to a huge range of decent apps, especially games - and Nokia with its under resourced and under supported Ovi store does not have that.

    For developers, why would they develop for Ovi where there is such a sparse range of content when you already have Android and iPhones to worry about. Nokia have definitely not convinced me - I cant wait to get rid of my old phone and get something new and exciting with a massive range of available apps with great new content added every day. I haven't yet decided if that will be an iPhone or an Android phone, or maybe I'll just wait and see what the Windows phone has to offer - it definitely wont be a Nokia though, and I don't know anyone else even considering it.

  • Comment number 25.

    Apart from the camera, the N8 looks like a "me too" product that just barely catches up with the smartphone competition. I thought the GUI looked ugly, slow and clunky when demonstrated to Rory on the video. The battery life specs look dismal too. Can't see it taking away sales from the competition but may make a Nokia die-hard fan happy.

    I would like to see Nokia turn things around because I'm in favour of healthy competition in the market but they need to leap-frog their competition - not just catch them up.

    Regrettably, I think more trouble lies ahead for Nokia. Their organisation requires a cultural transformation to compete more effectively. That's hard to do even with the wholesale change of executive management that appears to be underway. It also takes a long time and they may not have that luxury.

  • Comment number 26.

    @JimmyJammy

    "But the fact is, Mark, they are selling, in their tens of thousands, WITH subsidised contracts."

    Yes. Nokias are seling in the millions on subsidised contracts.

    Do come again.

  • Comment number 27.

    Mark_MWFC #26.
    (JimmyJammy)

    "..subsidised contracts."

    can either of you (or anyone else) provide stats for phones sold free of contract, please?

  • Comment number 28.

    @Mark_M$FT,

    That wasn't your point. Here is what you wrote:

    "Incidentally, how many Blackberries, Android handsets and iPhones do you think would get sold without subsidised contracts? Just askin'."

  • Comment number 29.

    @Mark_M$FT,

    And I must also add that once again you are confusing units sold with profit. Nokia sell millions of phones, millions of models, but make very little profit on each.

    A little Business 101 for you:

    Turnover Is Vanity, Profit Is Sanity, Cash Is Reality.

    So, turnover (Vanity) does not really work in your argument because the Profit (sanity) is so small, which results in very little Cash (reality).

  • Comment number 30.

    "Will that be enough? I'm sure the N8 will sell well, but the problem for Nokia may be that it still won't deliver the chunky profit margins enjoyed by Apple."

    How about the "V" word, volume? If those devices are cool enough and can sell more in volume, then I don't see why not. Nokia brought the smart phone to "everyone", so they could easily reinvent themselves. You need to appreciate also that the mobile handset market is rather volatile, due to constantly changing consumer taste and perception of what is cool. Apple's top spot with the high-end smart phone is being challenged by the Android platform, for various consumer reasons.

    However, I agree with you on Nokia's misplaced emphasis on the hardware.

  • Comment number 31.

    Of course, Nokia have realised that they need a change in their business which is why they've brought on board Elop as CE. What they have brought out now is still part of the old regime - it will be interesting to see what the new one does in transforming Nokia's business.
    Don't write off Nokia just yet.

  • Comment number 32.

    @JimmyJammy

    I'm not sure if you're sincere and a little confused or just a common or garden troll but let's assume it's the former.

    Macbook Pro's comment was that Nokia's sell because they're cheap on contract. Mine was that so is every other phone and Nokia still outsell them.

    Simples.

  • Comment number 33.

    @JimmyJammy

    Incidentally, is $830 million a big or small amount of money? Just askin'.

  • Comment number 34.

    @jr4412 #12

    "you support the FSF I take it"

    I do think that Free Software is a fundamental paradigm, and the FSF, regardless of whether one enjoys the style of rhetoric, has established it brilliantly.

    Closed source is cool too, when appropriate. If both paradigms are free to compete with each other, then evolution can do its work.

  • Comment number 35.

    @Mark_MWFC - perhaps, if you had read my whole post carefully, you'd know what I'm on about.

    Yes, this one phone will ship a lot because it will be practically given away, but only because "my dad" is used to Nokias and will only use it for basic calls and texts.

    Tell me honestly, how many people do you know who use Symbian phones as smartphones, as opposed to merely using it for basics?

    My guess is hardly any, because Symbian is still no match at all for the competition.

    Therefore, it will fail in the LONG-TERM. Nokia's marketshare is decreasing as Apple's and Google's are increasing - explain that one, smart guy.

  • Comment number 36.

    @Mark M$FT,

    "Incidentally, is $830 million a big or small amount of money? Just askin'."

    It depends what that $830m is, smart guy. Is it profit? I wouldn't know, since you just threw that figure out with no explanation as to what it is.

    Assuming it is profit; based on their revenue, it is a very small amount of money. Chump Change.

    I really can't see any point in continuing this debate with you Mark, it's obvious you are quite an arrogant chap. The writing is on the wall, profits are falling, share forecasts in Nokia are being slashed and Nokia executives are leaving en mass. Yet here you are, saying things are rosy and Nokia are doing well.

    Keep dreaming Mark, because one day you might wake up.

  • Comment number 37.

    @Macbook Pro

    As a smartphone? So... web browsing, music, maps, Facebook and apps use then?

    Just about all of them. Incidentally Apple's market share has been static for the last three quarters although it'll go up a few points next quarter. Nokia have increased theirs over the last four quarters on the other hand.

    @JimmyJammy

    You're funny. I like you.

  • Comment number 38.

    It is not inconceivable that Nokia could jump on the Android platform bandwagon, or even that they could create an app store for Symbian in the future. Either of those actions could prove to be game changers. Nokia may be resisting change for historical reasons, perhaps believing they should be setting standards and not following. Reality will dawn on them one day, and they will make the necessary changes to take the fight back to Apple and Google.

  • Comment number 39.

    Just taking the OS into consideration.

    Nokia will fail due to being years behind in the software stakes.

    Apple manage to capture an almost real feeling when using the phone. The icons glide in near realtime under your finger as if you were moving them. This is what all the other phones are missing. Liquid smooth polish. This and the super simplification is key in its success. In fact the list of why Apple have been trashing Nokia goes on but these two factors are key.

    Android is my closest contender but after looking at their phones they haven't got the XFactor either when it comes to the slick interface.

    The new name of these phones are called 'Web Superphones' and iPhone and Android are the first in this new category of smart phones. Nokia is yet to impress in this hip new generation device. They need some young fresh thinking blood on board.

  • Comment number 40.

    The N8 and E7 are nice pitches at the market, and I'll admit they made me double check my plans to leave nokia with my next phone. But just look at how they're peddling these Symbian 3 phones now, while announcing Symbian 4 for next April. All with no promise of an upgrade.

    Like how they marketed the N900 (Maemo OS) while announcing that it's the last (and only) phone with that OS, with no upgrade to its successor Meego, the latest botomless pit they found to throw money into after Symbian, and it's notable that none of their new hotshot phones runs meego, even though it was announced as their prospective high-end-phone OS when they killed maemo after just one production run.

    Nokia needs to be a lot more radical than this if they want to be a player five years from now, and it probably means dumping either Symbian or Meego for starters.

 

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